Australia Market rises on first trading day of the year

The Australian share market finished first trading day of 2020 in the green on Thursday, 02 January 2020, buoyed by easing Sino-U.S. trade tensions and positive policy thrust from China. Most of ASX sectors inclined, with healthcare and tech sectors being notable gainers, and helped to offset losses in the heavyweight banking and mining sectors. At closing bell, the benchmark S&P/ASX200 index inclined by 6.48 points, or 0.1%, to 6,690.58, while the broader All Ordinaries rose 7.56 points, or 0.11%, to 6,809.96. CY2019 was officially the best year in a decade for the Australian sharemarket, with the ASX 200 surging by 18.4%.

Sydney market commenced trading with firm footing on their first trading day of 2020, amid Sino-U.S. trade deal progress. The U.S. President Donald Trump said on Tuesday that Phase 1 of trade deal with China would be signed on Jan. 15 at the White House. That came following reports indicating Chinese Vice Premier Liu He, Beijing's top trade negotiator, could sign the agreement.

News of monetary policy easing by China, the region's top trade partner, also aided sentiment after the country's central bank on Wednesday cut the amount of cash that banks must hold as reserves to boost the economy. The People's Bank of China announced on Wednesday that it was going to lower the reserve requirement ratio for banks by 50 basis points with effect from Jan. 6.

Afterpay shares rose 4.5%, after the Melbourne-based fintech firm said California had approved its lending license for the U.S. state. That came as California regulator rejected a similar application for Sezzle Inc, an Afterpay competitor, knocking that stock down 20% to its lowest since its July debut.

Healthcare shares climbed, with drug maker CSL advancing 1%, while Cochlear strengthened 1.3%.

The energy shares were also up, with index heavyweight Santos gaining 0.7%, while Woodside Petroleum rose 0.4%. Oil prices notched the biggest annual gain in three years in 2019, supported by a thaw in the prolonged U.S.-China trade war and ongoing supply cuts from major oil producers.

ECONOMIC NEWS: Australia Manufacturing Activity Deteriorates Most Since 2016 - Australia's manufacturing activity contracted the most since the survey began in May 2016, IHS Markit survey results showed Thursday. The Commonwealth Bank manufacturing Purchasing Managers' Index fell to 49.2 in December from 49.9 in November. A score below 50 indicates contraction in the sector. Despite rising exports, new orders declined at the fastest pace in the series history. This in turn contributed to another fall in backlogs of work. Facing lower sales, firms cut production for a fourth straight month and at a survey-record pace. Employment also decreased in December.

CURRENCY NEWS: The Australian dollar, sensitive to shifts in broader risk appetite, was higher against the U.S. dollar on Thursday. The local currency was quoted at $0.7006 after rising from levels around $0.692 last week.

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